Financial assistance to friends and family is a-whole-nother ballgame that I do not recommend mingling.At this point, the comments seem to assess that the house needs to be short-saled.

Our 1.3 mil apartment purchase was assessed at 2.1 mil.

In the podcast, he pointed out that a flipper needs to be proficient in several different areas including negotiation, contracts, rehab assessment, appraisal, and marketing.  

Tenant compatibility is even more important as you are sharing common living space.

Additionally, raising rent, shopping around for cheaper, but appropriate insurance as well as potentially protesting your tax assessed value could help.

He bought the house in 1979 for 58,000 according to the county website and the house was assessed for 136,000 then.  

The basics: Assessed at $89,900Retail value $99,000-$105,0004 bedroom, 3 bath ranchCan purchase for $52,000 by assuming payments of $752 a month including PITIThe house will lease from $800-$8502014 Taxes were $841Estimated annual insurance $750Waiting to hear from owner how many years are left on the noteIf I am figuring correctly, there would be $204 a month positive cash flow along with a $5000 non-refundable option fee? 

Finally, click on the link to the county website that shows on Zillow and you will find the assessed value plus the value of neighboring houses for the most recent tax year.

They're having a horrible time with the insurance company to assess and recommend reputable companies to fix the damage.  

I completely agree with you on your assessment of the Residential market in Madison.